Assignment 1

Introduction to Systems Thinking

Mapping and Representing Stock and Flow Structure of Systems
Assigned: Wednesday 27 September 2023; Due: Wednesday 11 October 2023

This assignment should be done individually.

This assignment gives you practice with the structure and dynamics of stocks and flows. Stocks
and flows are the building blocks from which every dynamic system is constructed. The ability
to identify, map, and understand the dynamics of the networks of stocks and flows in a system is
essential to understanding the processes of interest in any modeling effort.

Check Course material for more on stocks and flows. Submit your work by email to Nisa
Usman musman21@ku.edu.tr

A. Identifying Stock and Flow Variables (2 Points)

Give two examples for reinforcing, and two examples for balancing feedback that is of
interest to you. Illustrate these examples with simple causal loop diagrams (CLD)s. Pay
attention to causal loop diagramming notation (loop identifiers and directions, polarities,
etc. check related course material).

B. Epidemic Model Assessment (2 Points)

Critique the Covid19 epidemic model we built in class and list/ discuss 4 of its main
unrealistic assumptions.
C. Identifying Stock and Flow Variables (2 Points)
The distinction between stocks and flows is crucial for understanding the source of dynamics. In
physical systems it is usually obvious which variables are stocks and which are flows. In human
and social systems, often characterized by intangible, “soft” variables, identification may be
more difficult.

❑ A1. For each of the following variables, state whether it is a stock or a flow, and give units of
measure for each.

Name Type Units

Example: Inventory of beer Stock Cases
Example: Beer order rate Flow Cases/week

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 Name Type Units
a. Daily sales of the iphone 14
b. US National Debt
c. China’s Trade Surplus
d. Your monthly rent
e. Accounts Payable
f. College athletes declaring their
intention to turn professional
g. Book value of plant and equipment
h. Promotion of senior associates to
partner at a consulting Firm
i. Fans of Taylor Swift
j. Euro/ dollar exchange rate
k. Employee morale
l. Greenhouse gas emissions of India
m. Interest rate on 30-year US Treasury
bond
n. Tesla Net Income
o. Stock Market Analysts’ Forecast of
Tesla Net Income
p. Phone calls on hold
r. List price of product
s. Incidence of attacks on a website
t. Cash flow
u. Employees of Amazon

D. Mapping Stock and Flow Networks (Pick 2 out of 3 Questions below) (4 points)

Systems are composed of interconnected networks of stocks and flows. Modelers must be able
to represent the stock and flow networks of people, material, goods, money, energy, etc. from
which systems are built.

For each of the following cases, construct a stock and flow diagram that properly maps the stock
and flow networks described.
 Not all the variables are connected by physical flows; they may be linked by information
flows, as in the example below.
 You may need to add additional stocks or flows beyond those specified to complete your
diagram (but keep it simple). Be sure to consider the boundary of your stock and flow map.
That is, what are the sources and sinks for the stock and flow networks? Are you tracking
sources and sinks far enough upstream and downstream? This process of deciding how far
to extend the stock and flow network is called “challenging the clouds” because you
question whether the clouds are in fact unlimited sources or sinks.
 Identify the units of measure for your variables and make sure they are consistent within
each stock and flow chain.
 Use Vensim PLE as a workbench to work on your graphs, and copy it from there.

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Example: A manufacturing firm maintains an inventory of finished goods from which it ships to
customers. Customer orders are filled after a delay caused by order processing, credit checks, etc.
Map the stock and flow structure, drawing on the following variables: Inventory, Raw Materials,
Production, Order Backlog, Order Rate.
Solution:
The unit of measure in this flow is widgets/time period.

Raw Materials Inventory

M aterial Production Shipment
Arrival Rate Rate Rate

Widgets
per Order
These are information links.

Order Backlog
Order Rate Order
Fulfillment
Rate

The unit of measure in this flow is orders / time period.

Comment: There are two linked stock and flow networks here: first, the physical flow of materials
as they are fabricated into products and shipped to customers; second, the flow of orders. The two
networks are linked because there is a direct relationship between physical shipments and order
fulfillment (assuming no accounting glitches or inventory shrinkage!)—every time a product is
physically shipped, the order is removed from the backlog and denoted as filled. The link between the
Shipment Rate and Order Fulfillment Rate is an information link, not a material flow. Note that
considering the units of measure helps identify the linkages between the two stock and flow chains.
Units:
• All flows in the materials chain: widgets/time period
• Materials and inventory stocks: widgets
• Order flows: orders/time period
• Order fulfillment rate: order/time period (since it is the number of widgets shipped per period
divided by the number of widgets per order).

Only the information links directly connecting the stock and flow networks are captured. Other
information links that must exist are not represented. For example, the shipment rate must depend on
the finished goods inventory (no inventory—no shipments). The purpose of this exercise, however, is
to map the stocks and flows, so these feedbacks can be omitted for now. Note that the shipment rate,
material arrival rate, and order fulfillment rate were not included in the group of variables listed in the
description but must be introduced to complete the stock-and-flow network. Also, the solution omits
some structure that might be added if the purpose of the model required it, such as inventory shrinkage
and order cancellation flows and the installed base of product (the stock filled up by shipments). The
model could be disaggregated further, e.g., splitting the order backlog into two stocks, “orders awaiting
credit approval”, and “orders approved”. The choice of detail is always governed by the purpose of the
model.

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 ❑ D1. Manufacturing Plant Assembly Line (2 points)
A manufacturing plant such as an oil refinery or assembly line has many thousands of machines and
tools that require maintenance. The goal of maintenance is to maximize equipment availability (up time)
while keeping maintenance costs low. Consider all the pumps in a chemical manufacturing plant. A
typical plant might have several thousand pumps. Pumps are either running, in working condition and
available to run if needed, broken down and awaiting repair, under repair, or taken down for preventive
maintenance. Map the stock and flow structure relating these various states. Hint: Identify how many
different states there are for your main stock variable.

❑ D2. Airport Passenger Mapping (2 points)

Assume the client is the TSA (transportation security authority) and that they are interested in
improving the quality and efficiency of the screening process at the airport. Map the
process of going through security at the airport. While the configuration may differ based
on timing and location, consider a process with the following steps:
• Customers must have their tickets and identification documents checked before
entering the scanning phase.
• Passengers must surrender all metal items—phones, etc.—prior to entering the body
scanner.
• The security process in question uses body scanning technology which requires
approximately ten seconds to complete.
• After the scan is complete, the traveler must wait until TSA has either confirmed that
nothing was identified or that the traveler requires additional screening.
• If the scan does identify something, then additional screening is required.
• Assume that the additional screening is definitive in the sense that following it
passengers are either allowed to enter the secure area or must surrender whatever item
is considered to be illegal.

 Note the final stages of the process differ depending on whether or not the scanner yields a
positive image. Make sure you capture the stocks and flows associated with both outcomes.
 For simplicity, you do not have to create a separate stock flow structure for luggage. That
said, do account for the fact that passengers may spend time waiting to surrender and
retrieve it.
 Accounting for luggage explicitly is a bit subtle. Try to add this to your diagram if you
want to stretch your skills (this part will not be part of your grade).

❑ D3. Pharmaceutical Drug Discovery (2 points)

Map the drug discovery and approval process for a typical pharmaceutical firm.
• The process begins with the drug discovery phase. Next comes the pre-clinical testing
phase. Next comes Phase I clinical trials. Surviving candidates then proceed to Phase II
and Phase III clinical trials. Application for FDA approval can follow. Drugs approved
by the FDA are then introduced to the market, where they typically enjoy patent protection
until the patents expire and generics can be introduced by competitors.
☺ Don’t forget to “challenge the clouds” in this example. How can drugs leave the
marketplace?

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